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Stocks Wrangle Another Win; Fiber Optics, Retail Rally, Tesla Tumbles

Stocks wrestled to a healthy finish Thursday in a session where early gains were dented by Senate testimony from Federal Reserve Chair Janet Yellen.

X The Dow Jones industrial average slimmed to a 0.1% gain, after climbing almost 0.2% in late trade.  The S&P 500 and Nasdaq ended up 0.2% each.  Small caps posted a weak session, with Russell 2000 futures ending only slightly below the break-even line.

The Nasdaq and S&P 500 dropped hard just after 10 a.m. ET, during the first half hour of the Fed chair's Senate testimony Thursday. The S&P 500 rallied back to retake its early-morning high. The Nasdaq posted its high of the day just ahead of Yellen's testimony.

The day's economic data had a mixed effect on trade, including a more slight-than-expected drop in weekly unemployment claims and a smaller-than-forecast increase in core producer prices for June.

Thursday's action left the Nasdaq composite ahead nearly 2% for the week and tracking toward its best weekly finish since late May.  The S&P 500 was up 0.9% and the Dow Jones industrial average held a 0.6% gain.

Target, Wal-Mart, Apple, Applied Opto Rally; Tesla Fades

Six of the 10 strongest gains among industries came from retail groups, with department stores and auto parts chains leading the procession.

Target (TGT) appeared to launch the retail rally, rising nearly 5% after boosting its second-quarter same-store-sales and earnings guidance, based on strong April and May traffic. Dillards (DDS), Kohl's (KSS) and J.C. Penney (JCP) all surged 5% or more. Wal-Mart (WMT) climbed 1.5% to lead the Dow industrials.

Apple (AAPL) was hot on Wal-Mart's heels, up 1.4% as it reached to test resistance at its 10-week moving average. The stock has been trading below that line since a heavy-volume drop on June 9.

Among auto parts retailers, AutoZone (AZO) and Advanced Auto Parts (AAP) popped 3%, while O'Reilly Auto Parts (ORLY) thrashed out a 5% advance.

Automakers, on the other hand, posted one of the day's two worst declines among industry groups. Tesla (TSLA) underwrote that decline, tumbling 2% in weak trade. The stock is in its second week below its 10-week moving average, ending 17% below its June 23 high.

Applied OptoElectronics (AAOI) sprung up 7% and triggered a rally in fiber-optic plays after preannouncing June-quarter earnings and revenue above analyst expectations. The stock spiked to new highs, but its consolidation was too short to be a cup base and too deep for a flat-base pattern, so offered no valid buy point.

Fiber-optic peer Lumentum Holdings (LITE) bolted 6% higher, gaining volume support on its rebound from its 10-week moving average.

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